Strategic supply chain framework for the automotive industry

Abstract

The changing business conditions of the 21st century has led to companies facing issues ranging from
globalisation, economic uncertainty to new technologies and increasing consumer demands. In the automobile
industry, as manufacturers design and build vehicles globally, their supply chains become increasingly complex
with challenges that often stand in the way of profitability and higher shareholder value such as long order-todelivery lead times, unreliable production schedules, excess inventory across the supply chain, lengthy demand
planning cycles and lack of visibility of suppliers. The effect of the global economic meltdown increased the
pressure on automotive executives to make right decisions about their supply chain for better performance. In a
highly challenging and competitive environment such as today, where supply chain is a popular tool for improving
the organisational competitiveness, an efficient and effective supply chain strategy is a must for automotive
manufacturers and their component manufacturers so as to meet changing consumer demands. The paper explores
the concept of lean and agility as generic supply chain strategies and presents a strategic supply chain framework
for the automobile industry as a possible strategy to respond to changing consumer demand.